Marc Andreessen says it’s time to build. But what’s standing in the way?

Medical equipment and financial conduits involve no rocket science whatsoever. At least therapies and vaccines are hard! Making masks and transferring money are not hard. We could have these things but we chose not to — specifically we chose not to have the mechanisms, the factories, the systems to make these things. We chose not to *build*.

You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally. You see it throughout Western life, and specifically throughout American life.

You see it in housing… You see it in education… You see it in manufacturing… You see it in transportation. Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?

That was a provocative article from Marc Andreessen. Adam Thierer comments.

Of course I would add defense acquisition to the list of cost-disease sectors. I think what’s going on in defense is simply a reflection of a more general malaise. Andreessen seems to point to culture as the problem. He wrote, “The problem is desire… The problem is inertia… The problem is regulatory capture… And the problem is will.”

There’s certainly an element of truth to that. Ross Douthat recently released a book titled “The Decadent Society.” But I think there’s something more tangible going on.

Peter Thiel marks 1970 as a turning point where a lot of big hardware and construction programs stopped pushing the envelop. Even before then, as people like Seymour Melman argued, the decline in American manufacturing and tooling industries was already on its way down in the 1960s if not before. Melman blames government cost-plus contracting for why American firms started losing out to Japan, Germany, and South Korea. You see that argument pop up again, particularly from Elon Musk and other in the space industry.

My favored theory is from Michael Polanyi. I can’t stress enough how important it is to read his work, but the basic idea is that we as a society now presume the sum of all knowledge that that which can be expressed by scientific laws and mathematical rules. And so government officials will only fund projects that are fully articulated to the Nth degree, complete with fully-costed networked schedules of all major activities and their dependencies. This hyper-rationalist way of doing things seeped into business schools and American industry more generally. It only works when building well within the state-of-the-art, where there is minimal uncertainty.

The method of plan-plan-plan-plan such that any independent third-party could verify the validity of the plan is at the core of why we get tied down. We approach the same problems not in new ways, but the same old ways. We try to add some weight, power, speed using linear extrapolations, and encounter the same difficulties. Such “low risk” plans end up to be the least likely to “bend the cost curve” or “push the frontiers.”

We no longer tolerate new approaches based on the conjecture of highly skilled designers, because they can’t be “proven” to work ahead of time to a bunch of laymen. But everyone agrees we are not at a final theory of physical laws. And even if we were, no one could claim we can predict and control all physical phenomena. And so we should regard the tacit knowledge of scientists and engineers as valid. They are anticipating fruitful endeavors, continually course correcting as information is learned. These efforts are the most likely to produce 10x or 100x returns.

Perhaps not all such efforts should be funded. But many more small experiments and proofs of concept should be allowed, then able to scale if worthy. And much more of this could be done if we remove the 20-50 percent of government funding spent on approvals, paper studies, consultants, and more. It isn’t a bureaucrat with an accounting degree that should determine the success or failure of a project. Instead, it is the principle of mutual control. Only scientists and engineers deeply engaged in overlapping research agendas are knowledgeable enough to evaluate merit of their colleagues.

Here’s a related part from Andreessen:

Every step of the way, to everyone around us, we should be asking the question, what are you building? What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building? If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you, and we need to get you into a position, an occupation, a career where you can contribute to building. There are always outstanding people in even the most broken systems — we need to get all the talent we can on the biggest problems we have, and on building the answers to those problems.

It should be obvious that such questions depend on perspective. As a cost estimator, the tag line was always: more realistic cost estimates prevent the self-interested services/contractors from “buying in” on production and allows for stable/timely budgets. Hence, cost estimators “support” builders. Indeed, I was working with one non-traditional contractor on their government proposal, and how much detail I demanded to meet the requirement led him to say, “It’s amazing that there’s any cost growth at all in government!” While this project was big, it wouldn’t be called innovative.

Another way of looking at it: cost estimates slow down decisions, requires huge data calls from contractors, forces risk aversion, locks-in long-term technical plans, and simply leads to much higher baseline costs so projects can squander cash without showing cost growth.